Everyone is reeling from COVID -19’s devastation of the world economy. Several industries have come teetering to a standstill, facing an unprecedented crisis that has left them crippled and struggling to survive the onslaught Coronavirus has wrought upon them.
How is the Australian Rental and Real Estate Market Holding Up?
The first quarter of 2020 was promising, with every capital in Australia experiencing a net increase in rent. However, after COVID-19 caused a massive surge of vacancies, experts are predicting a 10% rent decrease in certain locations.
The lockdown imposed because of COVID-19, coupled with the economic fall out of the lockdown resulted in vacancies, and spells possible trouble for the rental market although likely short lived.
Travel restrictions have exacerbated the situation since Airbnb’s have taken a massive hit.
The Domain Rent Report displayed an unprecedented rise in rent within Melbourne, Perth, Sydney, Adelaide, Canberra and Hobart.
Vacancy Rates in Australia
The National Vacancy rate according to Domain’s Rental Report is as follows.
It’s up by 0.1% from Feb 2020, and the current global and national trend is predicting it to go higher. Sydney, Perth and Darwin are the worst affected cities in the current market.
Sydney’s Rental Market
The current trend is leaning towards vacancies rising due to uncertain market conditions.
Demand for properties has fallen sharply, with fewer tenants looking to rent while the rented properties available outnumber the demand for them.
The government of New South Wales is attempting to provide relief to both tenants and landlords.
It’s actively thinking about a scheme involving deferring payment for land taxes or entirely waiving the amount, with the condition that they pass on the savings to tenants.
Sydney has some of the highest vacancy rates in Australia at 2.7%, and Treasurer Dominic Perrottet has assured all the stakeholders that the government is actively brainstorming ideas for its residential rent relief plan.
Currently, Sydney accumulated 845 more vacancies than last month, bringing the total tally to 14,528 vacant rental properties.
Melbourne’s Rental Market
The lockdown imposed to curb the spread of COVID-19 will have repercussions that will still be felt a year moving forward.
According to Domain, the current vacancy rate is 1.6%, with an increase of 0.1% because of the 583 additional vacancies during this period.
Before COVID-19, Melbourne was experiencing a boom in the rental market. According to senior research analyst Nicola Powell the supply couldn’t keep up with the demand, which resulted in strong growth for rents.
Brisbane’s Rental Market
Brisbane was easily the most stable rental market in Australia during the first quarter of 2020 till March, however even Brisbane would be hit by the negativity surrounding COVID-19.
Rental vacancies are expected to rise, and will be followed by a decrease in rent due to the competition between landlords.
Dr. Nicola Powell from Domain, informs us that state tourism hot spots would be the first to bear the brunt, with the bushfires coupled with the global pandemic pushing down the rental market on the Sunshine Coast, and other tourist spots.
New measures to help protect tenants and landlords in Queensland, are in the pipeline.
The Queensland government is expected to forbid landlords from requesting personal financial information from tenants, landlords won’t be able to draw down a tenant’s superannuation or expect tenant’s to sell personal assets to pay rent, however further alterations are likely.
Acknowledging that the current crisis being faced by the world during a global pandemic is no one’s fault, the Housing Minister Mick de Brenni informed everyone that these measures aim to protect the most vulnerable amongst us in society.
It would provide an opportunity to assist the landlords and tenants to sort out tenancy issues amongst themselves amicably.
The measure will be designed to help renters who are currently waiting for their Centrelink applications to come through. Tenants who do not enjoy financial assistance will be provided a month’s rent.
The assistance is capped at $2000 and will be paid directly to their landlord.
The eligibility criteria lists that the applicants’ residence must be in Queensland, have less than $10,000, must have applied to Centrelink for income support if they are unemployed, must possess a bond with the Residential Tenancies Authority, and the tenant must have attempted a negotiation plan with the landlord prior to applying.
If you are concerned about your property please reach out to our team.